circular-Long

Introduction

  • The Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV Scheme, 2024) has been enacted to resolve pending income tax disputes.

  • Objective: To reduce litigation, generate timely revenue for the government, and provide peace of mind and savings for taxpayers.

  • Commencement date: 1st October 2024.

  • Notification of rules and forms was released on 20th September 2024.

Eligible Cases

Definition of Appellant

  • Per Section 89 of the DTVSV Scheme, 2024, the following are considered eligible appellants:

    • Individuals with unresolved appeals, writ petitions, or special leave petitions as of 22nd July 2024.

    • Individuals who filed objections before the Dispute Resolution Panel (DRP) under specific provisions and received no direction from the DRP before the specified date.

    • Individuals whose assessments were pending after DRP directions.

Non-eligible Cases

Exceptions Under the Scheme

  • Tax arrears not covered include:

    • Assessments made under certain sections due to searches initiated under specific laws.

    • Cases with instituted prosecutions prior to filing declarations.

    • Undisclosed income/assets outside India.

    • Assessments related to international agreements under specific sections.

    • Cases covered under specific Acts (e.g., COFEPOSA, UAPA).

Payment Structure

Tax Arrears Payment

  • Amount payable depends on the timing of the declaration:

    • If declared before 31st December 2024: 100% disputed tax, but lower for certain categories.

    • If declared after 1st January 2025: Higher amounts apply.

  • Special provisions include:

    • 50% payable if the appeal was filed by the income tax authority or in cases of favorable prior decisions from higher courts.

Forms and Timelines

Types of Forms

  • Four forms specified:

    • Form-1: For filing declaration.

    • Form-2: Certificate by the Designated Authority.

    • Form-3: Payment intimation form.

    • Form-4: Settlement order.

Key Timelines

  • Declaration must be filed before 31st December 2024 to maintain lower thresholds.

  • Fees determined by the Designated Authority within 15 days post-declaration.

Specific Queries and Responses

Search Assessments

  • Assessments under sections 153A or 153C based on initiated searches are not eligible for the scheme.

Rollback Years

  • An applicant can choose to settle fewer than four rollback years; exceptions apply if certain years lack qualifying transactions.

Penalty Appeals

  • Taxpayers cannot settle penalty appeals without settling related tax disputes.

TDS Issues

  • Disputes involving TDS/TCS deductions are covered only if the tax itself is in dispute.

Interest Waivers

  • Interest waiver applications under specific sections do not grant eligibility under the DTVSV Scheme.

Conclusion

  • The DTVSV Scheme, 2024 aims to streamline the settlement process for tax disputes, providing clarity and structured options for taxpayers amidst ongoing litigation.